In terms of implications and the scale, Goods and Services Tax (GST) deserves to be called as the single largest tax reform in the history of India. This tax reform will kick-start the new system of destination oriented consumption tax and will comprise of interstate as well intrastate commerce and trade transactions.
Lucrative subsidiary planned for MSMEs
GST is set to offer a broad array of advantages to enterprises in small and medium sector. One of the incentives will be in the form of subsidy for those enterprises that embrace cloud computing. Small and micro enterprises can look forward to a handsome subsidy up to Rs 1 Lac provided these are adopting cloud computing for streamlining communications and management of correspondence through innovative applications.
Cloud computing also helps design bespoke IT infrastructure backed by custom software for the organization. Medium and small organizations can ensure to remain upgraded in various aspects of business operations.
Government plans to offer this subsidy on client charges for the period of two years according to modified guidelines that relate to the Advancement of Information and Communication Technology in MSME Sector. The companies need to issue the entire payment to specialist enterprise and the disbursement of subsidy will be effected via direct advantage exchange mode.
Assets will be initially dispensed by office of the development commissioner specially appointed for MSME sector to Telecommunications Consultants India Ltd and thereafter the amount of subsidy will be transferred to beneficiary accounts of MSMEs.
Leveraging cloud computing for seamless GST compliance
Cloud computing and other IT technologies are part of Information and Communications Technology or ICT. Majority of the organizations are found to be skeptical about cloud adoption due to a myriad of concerns. It is expected that these companies will be encouraged to adopt cloud computing solutions by exploiting the subsidy scheme.
Administrations of cloud computing are proposed to be divided in two categories. In the first category the maximum subsidiary of Rs 1 Lac for every unit that is eligible. This will available for not less than two years in the Micro and Small Enterprises category.
If the unit has incurred lower costs for procuring cloud applications, then these will fall under second category. This subsidy will be borne by utilization administrations with support from central government as well as small and micro undertakings.
According to reliable estimates, the total expenditure for these subsidiaries will be approximately Rs 69 Cr and the contribution pledged by the center will be to the tune of Rs 41.40 Cr.
The move will certainly help boost adoption of Information and Communication Technology at micro and medium level. Moreover, implementation of cloud assisted application will be essential for complying with upcoming GST system that heavily depends on use of internet medium.
It must also be understood that cloud computing has emerged as a highly reliable and robust solution for management of storage and a myriad of business processes. No wonder, cloud solutions have been viewed as extremely practical alternatives to on-site IT infrastructures.
Micro, small and medium enterprises need to exploit these financial sops while embracing cloud computing in the GST regime.